Q1 2020 Earnings Call

[music].

Good morning.

Any mosinee dry and I will be your conference operator today.

At this time I would like to welcome everyone to de Tennant company's 2021st quarter earnings Conference call. This call is being recorded.

There will be time for Q1 day at the end of the call.

Please press star one if you would like to ASCII question.

After the killing day. Please stay on the line for closing remarks for management.

If you have joined our call today via telephone and walked into the copper in its called presentation on your computer leaves me with the audio on your computer to avoid potential quality issues during the call.

Thank you for participating antenna to companies 2021st quarter earnings Conference call.

Beginning today's meeting is what Mr. William freight senior director of global find financial planning and analysts and Investor Relations for Tennant Company Mr., Pete you maybe gotten.

Thank you Sandra good morning, everyone and welcome to Tennant Company's first quarter 2020 earnings Conference call I'm, William Free Senior director of Global financial planning and analysis and Investor Relations.

Joining me today, our Chris Killingstad tenants, President and CEO, Dave Holeman, Chief operating officer, and Andy's Moolah, our interim CFO.

Today, we will update you regarding our first quarter performance and the broader business impact of the Corona virus pandemic.

Chris will brief you on our operations and Andy will cover the financials.

After our remarks, we will open the call to questions.

Please note a slide presentation accompanies this conference call and is available on our Investor Relations website at investors duct Tenneco dotcom.

Before we begin please be advised that our remarks this morning, and our answers to questions may contain forward looking statements regarding the company's expectations about future performance.

Such statements are subject to risks and uncertainties and our actual results may differ materially from those contained in the statements.

These risks and uncertainties are described in today's news release and the documents, we file with the Securities and Exchange Commission.

We encourage you to review those documents, particularly our safe Harbor statement for a description of the risks and uncertainties that may affect our results.

Additionally, on this conference call, we will discuss non-GAAP measures that include or exclude certain items.

Our 2021st quarter earnings release includes the comparable GAAP measures and a reconciliation of these non-GAAP measures to our GAAP results.

Our earnings release was issued this morning via business wire and is also posted on our Investor Relations website at investors Dot Tenneco dotcom.

Now I'll turn the call over to Chris.

Thank you William and thanks to all of you for joining us today.

We've all witnessed a remarkable remarkable turn of events since our last opportunity to speak with you.

At the outset I want to wish you all.

Best as you face your own challenges and this pandemic.

And discussing our results we will provide as much contracts as we can regarding what we are seeing and how tenant is facing were continues to be a fluid and unpredictable situation.

To date, the primary impacts on our business has been related to temporary plant shutdowns as well as slowdown and sales to some end markets.

Mid widespread closures of customer facilities.

Regarding our plant shutdowns during the first quarter, specifically tenants China factories were closed for two weeks in February.

And we temporarily suspended operations at our plants in Italy, and the United States towards the end of March.

In accordance with local directives and for planning purposes.

As of today, although all of our plants are not yet back to full productivity. We are able to operate and are doing so subject to the latest official guidance.

On health and safety.

As for our first quarter.

It was the story of two strong months and one difficult one.

We saw strong revenue performance through February.

Led by North America, Latin America, and our EMEA regions.

However, as local shutdowns began to take hold in March we saw significant drop offs in sales across all regions, but particularly in Italy, France, Australia, and North American markets.

As we move manage through this pandemic are guiding principles are first and foremost to prioritize the health and safety of our employees customers and business partners.

We take very seriously our commitment to provide the equipment parts and service our customers need to keep their facilities clean and safe.

We support a wide range of essential businesses and consider tenant to the essential in meeting their needs.

Second we will manage our costs and cash flow to maintain liquidity.

And third we are ready to make the tough decisions necessary to weather the storm, while preserving our ability to ramp up quickly as markets recover.

With these guiding principles in mind, we have implemented a number of measures across our global operate operations to minimize the financial impact of this pandemic.

As announced we have a dedicated response team in place led by our Chief operating Officer, Dave handle.

To support our locations around the world and managing the challenges of our business as they emerge.

We're fortunate to have Dave in this role to ensure we are executing on the most important initiatives and following through on our guiding principles.

With respect to our supply chain, we have established cross functional and daily communications with suppliers to review track and prioritize high risk components. We have also identified and activated alternative suppliers materials and components as needed.

To date, we have been able to avoid major supply disruptions.

Regarding transportation, we have set up tracking reporting and communication channels with carriers to understand their risks and to evaluate available options where necessary.

At the same time, our customer service teams have done a great job working with customers to avoid missed deliveries due to closures they may be experience.

Related to costs.

We've implemented a number of actions to protect our business specifically, we have initiated a global mirrored freeze while operating within the applicable laws and regulations and have also implemented a hiring freeze for non essential roles.

We have also suspended all non essential business travel and all non business critical discretionary spending.

Lastly, I will forego, 100% of my salary through the second quarter.

At the same time, our senior leaders will forego, 35% of their salaries and the board of directors has elected to take a 50% cut in pay.

We've also implemented for low and pay reductions across our global workforce to the extent possible under local laws and regulations through the second quarter.

We are monitoring developments daily and I am proud of the way our team members have responded to a situation that was and imaginable just a short time ago.

Tenant is a highly resilient 150 year old business.

Which is due to the amazing team we have across the globe.

While the conditions, we are operating and continue to unfold. It's important to recognize that we have identified all believers available to us and we are 100% committed to doing what is necessary to emerge from this crisis and a strong position to serve the needs of our customers.

At the time of our Q4 call I expect is that our focus today would be on our enterprise growth strategy of winning where we have competitive advantage, reducing complexity and building scalable processes and innovating for profitable growth.

While the market landscape has changed dramatically in the past three months the pandemic does not prevent us from following through on the strategic initiatives that we've already set in motion.

In fact, those initiatives not only help us manage through this period, but can also enable us to emerge from the pandemic as a stronger company operationally.

We will continue to execute on our enterprise strategy to the extent that we can because the initiatives are within the four walls of tenant and are focused on improving the companies operating model, which continued to help us evolve. Despite this fluid environment.

Lastly.

I want to say a special thank you to Keith woodwork.

Our former senior Vice President and Chief Financial Officer.

As announced Keith has elected to resign.

Andy Civil we'll continue to serve on an interim basis until a permanent CFO as named.

Keith will be working with tenant to ensure a smooth transition.

Through the end of July.

On behalf of everyone at tenants I want to thank Keith for as numerous contributions during his time with the company.

And we wish him the best in all his future endeavors.

With that I'll turn the call over to Andy.

Thank you, Chris and Hello, everyone.

Please note that in my comments today any references to earnings per share, both GAAP and non-GAAP or on a fully diluted basis.

As Chris noted tenants first quarter results reflect the initial negative impact from the current Alaris pandemic.

For the first quarter of 2020, Tennant reported net sales of $252.1 million.

The down approximately 4% year over year.

Organic sales, which excludes the impact of currency effects declined 2.4%.

To provide some context for the impact we experienced on our financial results from the endemic in the first quarter.

We recorded a quarter to date organic growth of 6.7% through February.

And a 16.8% decline in March which resulted in the 2.4% organic decline in the quarter that I just mentioned.

We believe most of the organic sales decline in March 2020 is due to defend them.

On the bottom line for the quarter, we reported net earnings of $5.2 million or 28 cents per share.

Down from $5.4 million or 29 cents per share in the prior year.

Adjusted EPS, which excludes certain non operational items and amortization expense.

Totaled 57 cents compared with 72 cents in the prior year.

We will now take a closer look at our first quarter sales results by geography.

As a reminder, and we grew sales into three geographies the Americas, which includes all of North America in Latin America.

And there which covers Europe, the middle Eastern Africa.

In Asia Pacific, which includes China, Japan, Australia, and other Asian markets.

Sales in the Americas improved, 1.1% or 1.9% organically, resulting in tenants 10th consecutive quarter of organic growth in the region driven by strength in both North America in Latin America.

Our North American results can reflect continued demand for tens autonomy this cleaning machines.

As well as pricing actions related to our enterprise strategy.

Sales in Latin America were primarily driven by strength in Mexico.

As noted some of the company's manufacturing plants in North America were closed briefly towards the end of March for cleaning in the interest of employee safety.

Sales in the Europe Middle East in Africa region were down, 7.8% or 4.9% organically.

Due to the broad economic impact of the pandemic with the largest declines recorded in Italy and France.

The company as regional manufacturing plants were closed for one to two weeks in March depending on location and in accordance with local government directives.

Also shutdowns of customer facilities were widespread in March.

Which had a negative impact on our sales for the quarter.

Sales in the Asia Pacific region decreased 25.8% or 22.9% organically.

Primarily as a result of significant decreases in sales in China due to the pandemic.

Sales in Australia also declined due to the pandemic along with the negative impact from the timing of strategic account orders.

Tenants manufacturing plants in the region were closed for approximately two weeks in February in line with local government requirements.

Now onto margins.

Adjusted gross margins during the first quarters of 2020 in 2019 were 42.0% and 41.2% respectively.

The year over year increase primarily reflects actions related to tenants, new enterprise strategy, including pricing and cost out initiatives.

As well as favorable freight costing which more than offset the negative effect of labor and material inflation.

Turning to expenses.

During the first quarter, our adjusted SNA expenses were 32.3% of net sales.

Compared with 32.5% in the year ago period, mainly as a result of cost containment efforts.

And adjustments to management incentives given the impact the current pandemic is likely to have on our financial performance compared to our original guidance.

As Chris discussed careful SNA management is a key component of our response to the pandemic.

Regarding the impact of FX and during the first quarter due to significant strengthening of the U.S. dollar, especially relative to the Brazilian real and Mexican peso compared to the same period of last year.

We recognized a large currency transaction loss of approximately $4 million.

Adjusted EBITDA in the first quarter of 2020 was $26.1 million or 10.4% of sales.

Compared with $29.5 million or 11.2% of sales in the first quarter of 2019.

The decline resulted from lower sales in the quarter as well as the foreign currency loss that I just mentioned.

As for our tax rate.

In the first quarter the company had an adjusted effective tax rate of 20.5%.

Compared to 21.5% in the year ago period.

The difference was mainly due to the projected mix in full year taxable earnings by country.

And an increase in discrete favorable tax items compared to the prior year.

In the first quarter of 2020 as mentioned, our adjusted EPS, which excludes certain non operational items and amortization expense was 57 cents.

Compared with 72 cents in the first quarter of 2019.

Turning now to cash flow capital allocation and balance sheet items.

In the first quarter of 2020 tenant generated $8.7 million in cash flow from operations, primarily from business performance.

We paid $12.4 million and capital expenditures in $4.0 million in dividends in the quarter.

As Chris mentioned, we are managing our capital spending closely to ensure we are focusing on the critical projects that support our safety and growth initiatives.

As it precaution the company has drawn and additional $125 million from its $200 million revolver.

And as approximately $30 million of remaining Undrawn funds.

As of March 30, Onest 2020, the company had $192 million in cash and cash equivalents.

Which includes the additional $125 million draw that I just mentioned.

Lastly, as previously announced the company has withdrawn the full year guidance. It provided on February Twentyth.

Due to the uncertain nature of the pandemic.

While we don't have visibility to the rest of the second quarter. We saw April organic sales declines of approximately 30% as a result of continued slowdowns in sales to some end markets and mid widespread disruptions to our customers.

While the company does not have adequate visibility regarding the impact on its businesses and financial results for the remainder of fiscal 2020.

We will do whatever is necessary to maintain sufficient liquidity.

And to preserve our ability to ramp up quickly as markets recover.

We'll now open the call to questions. Operator. Please go ahead.

As a reminder to ASCII question Pat Star in the number one.

Well, thank you Todd.

Pause for just a moment to compel to today roster.

And your first question comes from Christopher Laurie.

Hey, good morning, guys doing well.

Progress made good morning, just start with the last comment in terms of the.

30% organic decline that you saw in April with sat across.

Kind of all that geographically using was it in all focusing and any place specifically.

It was pretty widespread Kristina we saw declines it really in all all regions. All all areas of the business I think a male is probably a little bit worse in some regions, but they're all pretty pretty consistently down.

Yes, I'd also say just in terms of customer segments, what we're saying is that.

This is relative strength scenarios like healthcare retail anything associated with grocery in E commerce and transportation while sectors like.

Hospitality education, all public revenues.

Our.

Fallen off quite dramatic dramatically.

And that makes sense makes sense.

So I'm trying to determine at fiscal year 20 wherever that that may come in from a revenue standpoint.

Is that kind of the new base that we should be thinking about for fiscal 2001, maybe just talk about the puts and takes as to why that would be the new base or why what might make sense to think that the that 2% to 3% organic growth target.

Potentially.

Could be a little stronger that in 21 just.

Kind of Big picture standpoint.

Yes, I think I think it's a good question I think it's honestly, it's just a little too early to really have project. At this point, we don't know we don't have visibility for the year and really to think about 2020, and how that might look and it's just a little generally a project that we don't know right now as people are talking about the recovery is it a V that in EU is at al.

And we need to wait to see other things develop but certainly we're still focusing on our on our strategy and can move forward a lot of initiative that respect, yes, I think it's important to remember we said that the new enterprise strategy a lot of what we're working on no we've already rolled out and we'll have an impact.

Many of the initiatives within our within the four walls of tenant others to really key objectives that we are trying to accomplish one is overall business simplification and improvement in our operating model and I would say that everything this within our control is is proceeding. According to plan. So the key variables really revenue.

Recovery, so our senses that when revenue starts to come back our EBITDA improvement goals should fall. So I think that the others. The general promise of what we're trying to accomplish share hasn't changed.

But it is revenue recovery dependent on them as we all know we don't have.

Visibility to one that's going to happen, yes, I think it's a good point long term I think we had the same goals that we laid out before it's just it's difficult to project 2021 at the moment.

Got it is helpful last one for major.

Just wondering if this if there's any areas that tenant might possibly emerge from the pandemic kind of in improved competitive position them is there obviously from an operational standpoint, you continue to focus on the improvement there from from kind of bigger thoughts in terms of what you're seeing.

In the marketplace any reason to think that that you may even be.

Better competitively positioned in certain areas than you are currently.

Well.

It's a possibility, but we'll just have to wait and see how things play out right now where we know as we've said like in health care. We're it's doing okay not great. We know some parts of healthcare are struggling as well and they cancel elective surgeries and all of that and that has had an impact.

But I think right now.

Most of facilities are focusing intensely on sanitization and disinfecting misting spraying.

They're not focusing on the floors as much but I have a feeling that when the dust settles and everybody goes back and looks as to what's going to be required from their cleaning protocol protocols those cleaning protocols could become much more robust.

And and take on a higher priority for our for facilities and what we know is is that in all the covert virus exist in the soil loads on floors. So they are going to have to be clean those part of an overall cleanliness regiment in a facility and the other thing. We now is that visits on the floor. It gets.

On the shoes on the shoes tracking with across the entire facility. So I think there. There is a there is a likelihood that there will be a higher standard of cleans. It gets established coming out of this and if that is the case I think that we have.

A big role to play on that but I think it's too early to tell but it's definitely possible we're monitoring.

We are monitoring this also in terms of our innovation agenda, we're looking at what other things can we do.

To supplement what we already do two will be an even more important player in the cleaning marker.

In the future.

Now that makes sense, alright, guys I'll jump back in line. Thanks much.

Thanks, Chris.

Thanks.

Your next question comes from Michael Shlisky with doctrine company.

Good morning, everybody.

I want to where Michael.

So I know Youre you were in the process last quarter of trying to work on developing some new models.

Autonomous scrubbers.

Just what's going on now with the pandemic.

Make that process more difficult.

Thank you Ben kind of.

First on the calendar, there or perhaps even more broadly for your R&D in general.

Kind of keep your pipeline of innovation going throughout all this.

Well.

We actually think that are autonomous claiming machines, there's real opportunity of there.

Going forward as you can put these machines central facility. They run autonomously nobody has to be in the room with them you can deploy labor to other very critical cleaning tasks. So we we continue to see a great level of interest in our AMR program and one of the things that we have absolutely protected in our.

R&D budget is the is the eight EMR.

Of products and technology roadmap that has not been compromised battle.

So we're going full speed.

Great perfect.

They also wanted to ask about.

The impact you've seen so far on the whole good sales versus the parts and service sales.

Okay, and congratulate versus in the first quarter and what's the difference you might look like here in the second.

Between the two.

Good one micro faster than the than me.

The other one here.

Yeah, well and providing any specifics on those two but generally they followed a similar trend and I think what we'd say is.

Perhaps in the short term, leaving the medium term service might be a greater opportunity as Chris mentioned, there's there's some perhaps other cleaning protocols in the short term customers me at the focused on so cleaning might be a or sorry service might be an opportunity in the short and medium term.

Yes, these capital purchases or delay it again, we don't see any trends that necessarily but it could they could do something we see any future, but generally speaking what we're seeing now is a similar slowdown to both we have still been able to get our service techs out in the field and it's equally as important for our customers to make sure their machines, especially in critical areas are being service. So it's been.

Similar trend for both and maybe some opportunities.

Particularly the service are you going forward.

Now I'll add to that that if you look back to the 2008 2009 period and as people put all through a purchasing new machines and therefore have to service their existing machines. We did see that service parts and consumables was actually a more robust part of our portfolio for a period of time.

Yeah.

Yes.

We're not far enough into this than all of that dynamic is going to play out.

This time around but theres a high likelihood of will.

Okay great.

Third they wanted to ask about your inventories and the working capital.

I am curious Dan if you guys feel for what kind of inventory days can you can you can you bring this to try and harvest. Some are your cash that's being used than you were in capital.

Are there any targets are going you've got at least for the next couple of quarters here.

Yes, we certainly recognize at the end of 2019 that.

Working capital is higher than than we like and recognize that there was one of our our big goals for 2020 admittedly. This this tend to make a strong some of our are fairly aggressive goals.

And maybe delayed them a little bit.

We had a focus on kind of navigating through the pandemic, but certainly there's still an opportunity for for working capital reduction yet I won't share any specific targets, but it's front and center for us and something we are focusing on and it's not just inventory. It's it's also thinking about our receivables and how we can collect those.

Maybe more rapidly or differently as our customers and maybe working on our payment terms of customers and then I know in payables as well are there things, we can do with with our suppliers.

In in those terms as far as our payment terms go.

And then you mentioned inventory is there are lots of opportunities for us thats. The good news I'd say in the inventory front end is something we're definitely working on I'd say, it's an opportunity for tenant from a cash flow perspective for certain but I will provide any specifics on targets or goals.

That's because we have an important follow up Andy you had any issues with any customers with collecting amounts due over the last month or so.

No no we haven't actually we are talking to customers very regularly as you can imagine.

And talking to our teams both in the us and overseas about their collection efforts. We haven't seen anything widespread there are pockets of of customers that are they're asking for me be extended payment terms, but we haven't seen anything of any magnitude at this point.

Reflecting receivables you feel real good of our cash position, it's fairly much higher than we normally carry it because of the draw and we continue to see.

Good cash flow.

Matt from operations.

Okay I'll leave it there, thank especially everybody.

Thanks much.

And your next question comes from Marco Rodriguez with Stonegate capital.

Good morning, Thanks for taking my questions.

Mark Warner highest I had hey, I had a jump on the call little bit late so I positive purity went over this but.

I was wondering if you can maybe talk a little bit about.

The disruption or lack thereof that social different seen lack of traveling might have on your particular sales cycle I understand that some of your customers operations are shut down you, obviously can't deliver anything when they're shot, but just kind of trying to understand that the sales cycle and how.

Some of the.

Aspects that governments are trying to do to kind of limit the spread might be impacting that cycle.

Well I don't know one new jumped on the call. We did say that if you look at our customer segments in over there were the ones that are performing better our retail anything having to do with grocery E. Commerce is doing okay healthcare as doing okay transportation is as well.

And then the ones, where we think that are struggling more not surprisingly education.

Hospitality and all public venues right. There that you have a business pretty much dried up there so.

Senses, we take a look at one could argue demand curve store to moving in a positive direction, it's really one more.

More of our customer segment start to open up and.

And return to more normalized operations, what we're doing is one of things we've done as being very very proactive we are seeing and comps in touch with our customers. Let them know the we have the capability to serve them. Both in terms of the products the sales support service and parts and consumables. So thats. So we're telling the some this year.

Rather you, let us know we're here, we're ready and fully engaged to get back on track with you.

Maybe just to build on that too one thing I'd say as we know our customers well and remote selling and certainly something you can do and you know your customer well and I think thats an advantage tenant as right now I mentioned before that we're still able to service our customers in critical areas and that hasn't been an issue, but I think this distance isn't seeing social listening.

Hasn't had a major impact on our ability to sell our product I think it's kind of what with Christmas. This plan.

Yes, we basically review that ourselves is providing a sell an essential services in this environment and we can basically you can sell to anybody who is open for business. So as more people open for business, our our sales growth should reflect that.

Okay very helpful. And then I heard the comment on on the April sales being down 30% pretty broad base I.

Okay, and obviously see the numbers in Asia I was wondering if maybe you can kind of talk a little bit if you havent already about the cadence of sales in Asia Pac and then kind of how those sales may have come back or Didnt in terms of one that.

The locked out kind of got lifted there.

Yes, yes, yes, the issue their site. So one thing we were monitoring to see is exactly your around your question and we had the earlier shuts down shut down in February because obviously impacted China did earlier.

But but the issue we experienced it wasn't we're not necessity seeing a robust recovery in that region. Because the end the end customers are still impacted and so there is that end customer. We just the end customer demand increase before we're seeing any real increases there at all so I mentioned in the April activity is down and that includes China.

And in the APAC and it's so we haven't really seen any kind of recovery to the extent yet.

That that maybe maybe some of us would have expected given that earlier impact from the pandemic, yes, there's two parts of our business in China one is.

The consumer local consumer driven part and the other part is the export driven part first we're starting to see consumer spending comeback Albert's slowly.

So that part of our business, we're probably recover more quickly but the export.

Business sizes is still very very slow.

If you look at our customer portfolio, we have more customers in that part.

Of the market.

Thats helpful last quick question for me.

I know that obviously that the situation right now is very difficult in terms of visibility.

No what is crystal ball as any better than than anyone else's, but I was wondering if you could perhaps talk a little bit more.

In general were in specifics if you can sort of what sort of scenario analysis you guys have gone through what might be your base case, where you kind of looking at a U shape of the shape and all shape are you factoring in the second wave just any sort of color that you can provide as far as.

What sort of base case, you're thinking about and how you're trying to potentially wrong the operations around that that base case scenario.

As a good question and ended you can imagine ANC all of us, which we can say more than did we just don't have visibility were you were running multiple scenarios and we've taken action we feel it actions to date. The Chris mentioned that we think is appropriate given a variety of scenarios and and we also have.

Ability to take more action, if if things deteriorate beyond beyond what we're seeing but really we can't I can realistically predict what kind of recovery, it's going to be I mentioned earlier. This is going to initiate for U shape rail shape. We don't have good visibility to that at this point in time. It Thats why were not really providing guidance.

But rest assured we're running a number of scenarios were planning.

From a worst case perspective to make sure we're prepared and liquidity as Chris mentioned is very important to us and we think we're we're well positioned there we think our strategy and on our position with our customers will help us get through this pandemic, but as far as specific goes in specific so we can't provide any any guidance any specifics of cases were tracking at this point.

Yes, but we have identified all the initiatives that we would need to execute under the various scenarios that were working on and we can pull the trigger produced a very quickly.

Whether it's.

On the most negative side or are there things comment a little more positively than we are currently predicted.

Got it thanks very helpful. I appreciate your time guys.

Thank you take care.

Okay.

Okay again, as a reminder to ASCII question, Hi Star and the number one.

Thank you next question comes from Brian Skorney with Gabelli Fine.

Hi, guys. Good morning, Thanks for taking my question.

Good morning room.

Two quick pieces I want to touch on.

Any.

In parts of the.

Probably not so much tenant portfolio, but on an IP sees offering some of the smaller.

Cleaning tools and may be mobile cleaning carts that.

The businesses say seeing more kind of an acute demand.

Pick up in the current environment, albeit probably small for the overall company and then secondly, I guess going back. It's something you mentioned, Chris I was curious to what you are hearing if you're seeing how to increase customer interest or how those conversations are going particularly for some grocery and.

A large warehouse ecommerce operators.

For you all you almost autonomous cleaning solution, how well that fits into.

The needs of those customers with the current dynamics.

Yes, so I mean.

It's not so much that we're having the conversations with the customers and they're coming back and telling us all we're going to implement more robust cleaning protocols I. Just think that we are anticipating because of what everyone is going through that as a possibility that more robust quitting protocols, we put in place and prioritize.

And that we need to be ready to provided I also think theres a.

Going to be a greater need for arena, the Sanitization disinfection and we're looking at ways that we can.

Add that to the the services that we already provide and so this is really just stepping back and saying in this environment.

When the dust settles work could it looked like it how can we play so it's uncertain at this time I think that is a possibility and go that direction and if it does we will be very very prepared.

Yeah.

Enter and apply that to you and you talk about CPC, which is interesting because one of the things that happens environments like goes from everybody is struggling.

The either they postpone.

Purchase a new equipment or maybe they they II downgrade to a cheaper piece of equipment and as you know the ITC value propositions morbid mid tier player at a lower price points. So.

We could see.

The that part of the portfolio that those but the other thing. We're noticing is that people are recognizing that the using mops and buckets, which a lot of people still do right now and cleaning of smaller spaces is not very sanitary at all and so this saying we got a stop that and we got to go to to.

Allergy and.

PC portfolio has a number of products that are very effective at the planning small spaces and so we think thats an opportunity there were monitoring very quickly I mean robotic turning now and hopefully at some point in time, we can say whether or not that has actually accelerated and helped our business.

Okay, great. Thank you so much and I'll help you guys and the whole team states safe and healthy.

Newsweek interviews alone.

Thanks.

And your next question comes from Joe Mondello, Cindat even company.

Hi, everyone. Good morning, hope, you're all doing well.

We're in joke. Thank you.

So I apologize I missed a little bit of the from beginning of the call Paul Doug If I'm asking anything and repeat.

You mentioned that January February.

You mentioned the growth rates versus what you saw in March.

Where was most of that growth coming from in January and February.

So the it was really it's all all regions all areas did have growth most of it came from Americas in EMEA, primarily using in North America, and Latin America had good growth.

But a mandate as well so that all were all were removing well.

Okay and.

You.

Yes.

Just a question on the autonomous part of the business and I think you're just talking about that spot.

Im curious number one a couple of questions first off you just introduce the products in Europe I'm wondering.

Before the big hit with Cold.

How that business the autonomous business in Europe.

Has trended when you compare it to the early stages when you introduce the products in Americas.

Yes, I would say that we're still very early stages in Europe, and Theres lots of interest, but I think that.

The coated prices has been to be delayed adoption, but.

The interest remains and.

I think once things stabilize we're going to slow start to see progress, but what we know is is that they am our solution given whatever is experiencing in our is in some way spot on I mean, because it allows you to put a machine and the facility not habit.

No labor associated with it you can take that labor and apply it to the more critical sanitization and disinfecting protocols that they have already established so there's a real benefit from that building I would say just if you look at the US right now and in all the.

The orders.

That we had in place for AMR, we expected to.

Be delivered in 2021, we have not lost a single one everybody's moving forward with it and as I also said if you heard this part but what is we're protecting within our R&D budget is our am our products and technology roadmap. So we're going full speed ahead, because we do believe that.

[music].

Through this and definitely only come out of that they are more.

Functionality and benefit the customers is going to be Vic.

Okay, and then in regard to your overall soda restructuring of the company that you've been focusing on for the last.

18 months 12 months.

Can you give us an idea of.

How does the cold endemic chain that does it accelerate things that will allow the downturn to that allow you to accelerate certain things that you wanted to do and regarding permanent.

Savings regarding this whole plan is there anything more that you can I know you were thinking about potential you're talking a lot more about.

Quantifying savings related to this plant obviously kobin affects.